Elizabeth Kim, Staff Writer

Published 10:36 am, Thursday, February 10, 2011

STAMFORD -- The Planning Board's public hearing on its proposed $37 million capital budget turned into a showdown between the board and two of the most vocal critics of city spending.

Joining a small audience dominated by city department heads and nonprofit agency officials, Karen Murphy and her sister, Board of Finance member Kathleen Murphy, took the podium several times Tuesday night at the Government Center to criticize choices made by the board. The duo have become a familiar presence at such public proceedings, acting as well-versed gadflies on often complicated projects.

They saved their loudest protest for the Urban Transitway, Mill River Park, and the renovation of Old Town Hall, three large-scale public works initiatives introduced by former Mayor Dannel Malloy and considered part of his legacy.

Karen Murphy, who along with her sister, lives in Shippan, argued that funding for such projects have come at the expense of sorely needed repairs and infrastructure improvements to the city's schools.

"I believe this board should take a more proactive role and decide what are the top priority projects," she said.

The current $37 million proposal for 2011-12 represents one of the smallest capital budgets in recent years. Including federal grants and other non-city sources, the plan calls for $64 million worth of spending. The Board of Education requested $21.4 million this year and received roughly half from the Planning Board, that of $9.6 million.

The allocation was roughly $1 million less than the previous fiscal year.

"The money that they are asking for sounds like a lot and it is," Kathleen Murphy said. "But at the end of the day, the Board of Education doesn't always get what you appropriate."

She was referring to the city's cash-flow bonding practice, which allows officials to spend bond revenue on capital projects that are ongoing or ready to begin. Factors such as weather, the bidding process for contractors, and pending applications for grants often make the timing of approved projects difficult to predict.

The result has been a backlog of approved projects that have yet to be financed and have been difficult for board members to track.

In September, the Board of Finance voted to force the administration to specify the projects that would be financed with each bond issuance.

In response to the criticism, Planning Board members asserted that such matters were beyond their authority.

"As members of the Planning Board, we really have no recourse on how the dollars are spent," said Theresa Dell, the board's chairwoman.

Defending the Urban Transitway, Dell argued that most of the funding was provided by federal sources but hesitated to give the exact breakdown. She expressed disappointment that representatives from the administration and the city's Engineering department, which oversees the Transitway, were not at the hearing.

Later, with the assistance of another city official who contacted Ernie Orgera, the city's director of operations, Dell confirmed that of the roughly $23 million budgeted next year for the project, the city's contribution is expected to be $2 million.

The women also took aim at the city's financing practices for Mill River Park and Old Town Hall.

Funding for Mill River Park is permitted through a municipal financing mechanism known as tax increment financing. Under that arrangement, the city can issue special bonds that are to be paid back with 50 percent of the property taxes that have been generated by new developments in the area neighboring the park. Rather than selling TIF-bonds, the city at one point used general obligation bonds to finance park improvements. The reason, according to city officials, was because general obligation bonds carried a lower interest rate.

To date, more than $8 million in city money has been spent on redevelopment and land acquisition for Mill River Park. The entire project is estimated to cost $60 million.

The budget for next year sets aside $1.5 million for the park. Of that amount, $1 million would be raised through TIF-bonds and the remainder would come from the city.

"I don't believe anyone is against a park," Karen Murphy said. "But to divert this kind of money from our schools, our roads, and our infrastructure is clearly not warranted."

She also objected to the board's budgeting of $300,000 to install a kitchen in Old Town Hall so the building is more suitable to rent for private functions.

In 2007, the city transferred its ownership of the building to three limited liability corporations so the $20 million renovation project would be eligible for federal tax credits. Because the city no longer technically owns the building, the Murphys said it would amount to the city financing a private venture.

But it can be argued that the city retains control through the Old Town Hall Redevelopment Agency, which is in charge of the companies and whose members consist of the mayor or his designee along with other city and community representatives.

Also, under the agreement, the city may elect to take ownership of the building as early as 2013, when the agency can dissolve itself.

In the end, the Murphys seemed to upstage officials in the audience who had come to plead for reconsideration. Echoing a sentiment made by many others, Al Barbarotta, the contractor in charge of school facilities, told the board, "You've done a fine job in spreading out the money. We would just like more."

Staff Writer Elizabeth Kim can be reached at elizabeth.kim@scni.com or 203-964-2265.